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CORPORATE TAXATION -
CORPORATE TAXATION
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TOPICS1. Meaning of Corporate2. Taxation Applicable to Companies3. Income Tax law: a. Residential status b. Tax applicability c. Tax Exemptions d. Tax Planning e. Provisions of MAT f. Problems on computation of tax liability, MAT, 4. Tax on Distributed profits of Corporate organizations5. Wealth Tax law6. Indirect Taxation of Companies7. Profession tax Applicability for corporate
organizations
REFERENCES
Direct Taxes Planning and management ---by Dr Vinod Singhania and Dr Monica Singhania
Income Tax Law : Dr Girish Ahuja and Dr Ravi Gupta
Business and corporate law: ICAI Referencer
MEANING OF COMPANY
Company as defined in the Companies Act 1956
“A company means any company formed and registered under this Act or an existing company”
“Company is an artificial juridical person having independent legal existence, limited liability, a perpetual existence and a common seal. “
POINT OF REFERENCE IN THE DEFINITION Incorporated association Artificial juridical person Separate legal existence Limited Liability Perpetual existence Common seal
CLASSES OF COMPANIES UNDER THE ACT
Companies limited by Shares Companies limited by guarantee Non-Profit making companies Unlimited Company Private Company Public Company Holding Company Subsidiary Company Public Financial Institution
INCOME TAX: DEFINITION OF COMPANYCompany u/s 2(17) is defined to mean the following:a. Any Indian company orb. Any body corporate incorporated under the laws
of a foreign country orc. Any institution, association or body which is
assessed or assessable as a company on or before 1st April 1970 or
d. Any institution, association or a body whether incorporated or not and whether Indian or Non-Indian which is declared by general or special order of the CBDT to be a company
INDIAN COMPANY [SECTION 2(26)
An Indian Company means a company formed and registered under the Companies Act 1956. Besides it includes the following:
a. A company formed and registered under any law relating to companies formerly in force in any part of India other than the state of Jammu and Kashmir and the Union territories
b. A corporation established by or under a Central, State or Provincial Act
c. Any institution, association or body which is declared by the board to be a company
d. A company formed and registered under any law in force in Jammu and Kashmir
e. A company formed and registered under any law for the time being in force in the Union territories of Dadra and Nagar Haveli, Goa, Daman and Diu
DOMESTIC COMPANY
It means an Indian company or any other company which in respect of its income liable to tax under the Act
has made prescribed arrangements for the declaration and payment of dividends within India in accordance with Section 194
DECLARATION AND PAYMENT OF DIVIDEND The share register of the company for all
shareholders should be regularly maintained at its principal place of business in India, in respect of the assessment year at least from April 1st of the relevant assessment year
The general meeting for passing of accounts of the relevant previous year and for declaring dividends in respect thereof should be held only at a place within India
The dividends declared if any should be payable only within India to the shareholders.
FOREIGN COMPANY
It is a company that is not an Indian Company
INDUSTRIAL COMPANY It means a company that is mainly
engaged in the business of generation and distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining.
COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTED
Owned by Government/RBI Section 25 Companies A company without share capital Nidhi or mutual benefit society Company owned by Co-operative Society Listed Company Public Limited company owned by
Government or widely held company
RESIDENTIAL STATUS OF A COMPANY
IMPORTANCE OF RESIDENTIAL STATUS It is necessary for determining the tax
implications If the company is not resident then the
tax implications will be different Application of DTAA and other taxation
rules to the company
WHAT IS RESIDENTIAL STATUS OF COMPANY
An Indian company is always said to be resident
A foreign company is resident in India only if during the previous year, control and management of its affairs is situated wholly in India.
In other words a foreign company is treated as non-resident if during the previous year control and management of its affairs is either wholly or partly out of India.
MEANING OF CONTROL AND MANAGEMENT
The place of incorporation of the company need not be where the control lies
A company may be resident in more than one country
Central control and management lies where the meetings of the Board of Directors are held.
Place of doing business may differ from the one where its control lies.
Control is different from shareholding control
RELATIONSHIP BETWEEN RESIDENTIAL STATUS AND INCIDENCE OF TAX
Under the Income tax Act the incidence of tax on a taxpayer depends upon his residential status and also on the place and time of accrual or receipt of the income
Indian Income is always taxable in the hands of the tax payer
Foreign income is taxable in the hands of resident of India. Foreign income is not taxed in the hands of non resident of India
MEANING OF INDIAN INCOME
If income is received or deemed to be received in India during the previous year and at the same time it accrues or arises or is deemed to accrue or arise in India during the previous year
If income is received or deemed to be received in India during the previous year but it accrues or arises outside India
If income is received outside India during the previous year but it accrues or arises or is deemed to accrue or arise in India during the previous year
RECEIPT VS REMITTANCE
The receipt of income refers to the first occasion when the recipient gets the money under his control
Once an amount is received as income any remittance or transmission of the amount to another place does not result in the ‘receipt’
It is not necessary that an income should be actually received in India in order to attract tax liability, the income that is deemed to be received in India will also be considered as an receipt in India
COMPUTATION OF TAX
TAXES UNDER THE INCOME TAX ACT 1961 Income tax as per normal calculations Special Income taxes MAT: Minimum Alternate tax Dividend distribution tax Wealth Tax
INCOME TAX UNDER NORMAL PROVISIONS The Income of the company is computed as in
any other case of person under the income tax Act
The Gross total Income will be determined by aggregating the heads (only head income from Salaries is not applicable to Companies)
Effect of Setoff and carry forward of losses and depreciation is to be given
From the Gross total income so computed the deductions under Chapter VI A shall be given
DETERMINING THE GROSS TOTAL INCOME
UNDER HEAD INCOME FROM HOUSE PROPERTY
The income from house property means any amount received as income from renting out a building or land appurtenant thereto
In cases of composite rent the rent received from furniture or other additional facilities will not be considered under this head but under the head of Income from other sources
DETERMINING INCOME FROM HOUSE PROPERTYU/S 24
First determine the Gross Annual value: This is determined by the following steps:
1. Municipal value or fair rent whichever is more but restricted to standard rent
2. Compare the value of (1) with actual rent received and consider the higher of the two as the gross annual value
Reduce the municipal taxes from Gross annual value On this calculate 30% and reduce this from the gross
annual value after Municipal tax Reduce the interest on loan for the house property to
the maximum extent of Rs 150000
PROBLEM
Municipal Value of a house is Rs 90000, fair rent Rs 140000 and standard rent is Rs 120000. The house has been let out for Rs 12000 pm. Municipal taxes for the year were Rs 40000 and 50% of these were recovered from the tenant. Interest on loan paid was Rs 80,000 for the year. Compute the income from House property
PROFITS AND GAINS FROM BUSINESS OR PROFESSION
Expenses that are expressly allowed as deduction:1. Rent, rates, taxes and repairs2. Depreciation3. Tea Development Account u/s 33AB: Maximum
upto 40% of profits is deductible if deposited in NABARD by an assessee carrying on business of growing or manufacturing tea
4. Site Restoration Fund: u/s 33ABA: Applicable to assessee carrying on business of extraction or production of petroleum or natural gas or both the maximum deduction allowed is 20% of profits
PROFITS AND GAINS FROM BUSINESS OR PROFESSION
Expenses that are expressly allowed as deduction:
5. Expenditure on Scientific research: allowed to the extent of 125% of actual contribution
6. Expenditure on obtaining telecommunication services- u/s 35ABB
7. Expenditure as contribution to funds for rural development: u/s 35CCA
PROFITS AND GAINS FROM BUSINESS OR PROFESSION
Expenses that are expressly allowed as deduction:8. Amortization of preliminary expenses u/s 35D: to the
extent of 1/5th of expenses every year9 Deduction for insurance paid u/s 3610. Bonus or commission to employees 11. Interest on borrowings12. Employers contribution to recognized provident Fund13. Employers contribution to gratuity fund14. Bad Debts15. Expenditure on promoting family planning amongst
employees: to the extent of 1/5th of Expenditure every year
EXPENSES NOT MENTIONED AS ALLOWABLE
The Income tax Act has given a list of expenses that are expressly allowed as expenditure for computing the Net Profit
However there are many other expenses that a business may incur for the general day to day functioning
These expenses are also allowed if it can be proved that the expenses were for the purpose of business.
EXPENSES EXPRESSLY DISALLOWED
The Income Tax Act gives certain expenses to be expressly disallowed
These are the amounts that are incurred as expenditure on payment of fines, penalties, interest etc for violating the laws
The amounts that are spent as capital expenses are also considered as disallowable if taken in consolidation. However they can be allowed as expense in form of depreciation.
EXPENSES NOT DEDUCTIBLE IN CERTAIN CASES SECTION 40A
Expenses or payments not deductible where such payments are made to relatives or close associates [Section 40 A (2)]
Disallowance of 100% of the expenditure if payment is made by any mode other than account payee cheque or draft [Section 40A(3)(a)] :Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee draft exceeds Rs 20000 no deduction shall be allowed wrt such expenditure
EXPENSES NOT DEDUCTIBLE IN CERTAIN CASES SECTION 40A
Expenses or payments not deductible where such payments are made to relatives or close associates [Section 40 A (2)]
Disallowance of 100% of the expenditure if payment is made by any mode other than account payee cheque or draft [Section 40A(3)(a)] :Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee draft exceeds Rs 20000 no deduction shall be allowed wrt such expenditure
CAPITAL GAINS
SHORT TERM CAPITAL GAINS: A capital asset held for not more than 36 months immediately preceding the date of transfer (12 Months in case of shares) is considered to be a short term capital asset. The gains on this asset will be treated as short term capital gains
LONG TERM CAPITAL GAINS: The gains from the sale of capital asset that is not a short term capital asset are called as long term capital gains
INCOME FROM OTHER SOURCES
The income that is not included in any of the above heads is called as income from other sources
The examples are like dividend, interest income, rent of furniture etc
EXEMPTED INCOMES U/S 10
Agricultural income Dividend from shares of Indian
Company Exemption wrt certain bonds and their
interest Other notified incomes
SETOFF AND CARRY FORWARD OF LOSSES AND DEPRECIATION FROM PREVIOUS YEARS
Normally the loss from one head of income can be adjusted to another head with some exceptions:
1. Loss from speculation business: The loss from one speculation business can be setoff against the profit from another speculation business
2. Loss from owning and maintaining race horses can be setoff against the profit from that business only.
3. Loss from Lottery, winnings etc cannot be setoff against any other head not even within the term of winnings.
4. Loss from a business that is exempt cannot be setoff against the profit of a taxable business
5. Short term capital loss can be setoff against gain from short term or long term capital assets but loss from long term capital assets can be setoff against the profit from long term capital assets only.
CARRY FORWARD OF LOSS AND DEPRECIATION
The loss and depreciation loss can be carried forward for eight assessment years in line to be setoff against the profit
The return for loss needs to be filed within the stipulated due date otherwise no setoff of the loss brought forward can be claimed
The speculation loss can be carried forward for only FOUR assessment years instead of Eight.
RULE FOR CARRY FORWARD OF LOSS IN CASE OF COMPANIES
In the case of companies in which the public are not substantially interested loss will not be carried forward and set off unless the shares of the company carrying not less than 51 per cent of the voting power were beneficially held by the same person both on the last day of the previous year in which the loss occurred and on the last day in which the loss is to be carried forward
EXCEPTIONS TO SECTION 79
Transfer by Gift to Relative: Where change in voting power takes place in previous year consequent upon the death of the shareholder making such gift.
Carry forward of depreciation, capital expenditure on scientific research and capital expenditure on family planning are not effected
Amalgamation/ demerger of foreign holding company
MAT
MAT: MINIMUM ALTERNATE TAX
MAT : SECTION 115JB
Find out the normal tax liability ignoring the provisions of MAT
Find out book profit Find out Minimum Alternate Tax If tax computed as per MAT is more
than Normal tax then provisions of MAT are applicable
PROVISIONS UNDER MAT
It will be assumed that book profits are the taxable income
10% of book profit (surcharge and education cess if applicable
Tax computed so will be the MAT The extra tax that the company has to
pay because of MAT will be available as tax credit which is set off against the future tax liability
HOW TO DETERMINE BOOK PROFIT
POSITIVE ADJUSTMENTS: NP computed as per normal provisions is to be increased by the following amounts if debited to the Profit and loss:
1. Amount of income tax paid or payable2. The amount carried to reserves3. Amount set aside for meeting liabilities other
than ascertained liabilities4. The amount by way of provisions for losses of
subsidiary companies5. The amount of paid or proposed dividends6. The amount of depreciation
HOW TO DETERMINE BOOK PROFIT
NEGATIVE ADJUSTMENTS: NP computed as per normal provisions is to be reduced by the following amounts if credited to the Profit and loss:
1. Amount withdrawn from reserves2. Depreciation 3. Amount of profit eligible for deduction
under Section 80HHC, 80HHE and 80HHF
EXEMPTIONS FOR COMPANIES
SECTION 80G
The contributions made to eligible institutions or funds are exempted to the extent of 100% of the contribution For Eg: PM Relief fund, PMs Armenia earthquake fund, National foundation for communal harmony etc
The contributions made to other funds deductable under 80G are exempt to the extent of 50% of the amount of contribution.
Maximum contribution that is exempted cannot exceed 10% of the adjusted total income of assessee
SECTION 80GGA
This is the contribution made to certain scientific research or rural development
This is applicable to all assessees not having income chargeable under the head profits and gains from business and profession.
Qualifying amount is 100% of the expenditure made.
SECTION 80GGB
Any sum contributed by an Indian Company in the previous year shall be allowed as deduction while computing its total income
The deduction will be related to the entire contribution made for the purpose of benefit to the political party, any publications in the nature of brochure, tract, pamphlet etc is also allowed
SECTION 80-IA Deduction is allowed to such assessees whose gross total
income includes any profits and gains derived by:-a. Any enterprise carrying on the business of developing or
operating and maintaining, or developing, operating and maintaining any infrastructure facility.
b. An undertaking which is engaged in the business of providing telecommunication service
c. An undertaking which develops, maintains etc an industrial park or SEZ
d. An undertaking engaged in generation, transmission, distribution of power etc
e. An undertaking owned by an Indian Company and set up for reconstruction or revival of power generating plant
f. An undertaking which lays and begins to operate a cross country natural gas distribution network
SECTION 80 IA
UNDERTAKING/ ENTERPRISE
PERIOD AND QUANTUM OF DEDUCTION
For all the above undertakings or enterprises other than the enterprise engaged in the business of providing telecommunication
100% of the profits and gains derived from such business for 10 consecutive assessment years out of 15 yrs* beginning from the year in which the enterprise develops and begins to operate any infrastructure facility or develops industrial park or generates power or distributes power.*for any enterprise engaged in any of infrastructure facility other than port, airport, inland waterway, inland port or navigational channel in sea the period of 15 yrs is substituted by 20 yrs
For enterprise engaged in the business of providing telecommunication service
For the first 5 consecutive AY – 100%Subsequent 5 consecutive yrs- 30%Out of 15 yrs beginning with the year in which enterprise starts to provide telecommunication facility
SECTION 80IAB
This is available to the assessee who is engaged in developing SEZ notified under the SEZ Act 2005
The assessee who is eligible for 80IA is not eligible for 80IAB
SECTION 80IB Available to the assessee whose gross total income
includes the profits and gains derived from the business of:
a. An industrial undertaking including cold storage, and cold chain facility
b. A shipc. A hoteld. Multiplex theatree. Convention centerf. Scientific and industrial research and developmentg. Commercial production and refining of mineral oilh. Developing and building housing projectsi. Processing preservation and packaging of fruits and
vegetablesj. Integrated business of storage and transportation of
food grainsk. Operating and maintaining hospital in rural areal. Operating and maintaining hospital located anywhere in
India other than excluded area
SECTION 80IB
Eligibility: The production should start within the stipulated time given
The quantum of deduction is as followsa. For operating a cold chain facility: first five yrs -100% next 5 yrs 30%b. Industrial undertaking in backward area: first 3yrs -100% next 5 yrs-30%c. Industrial undertaking other than specified
above: 10 yrs 30%
SECTION 80IC
Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any:
a. Business of manufacturing or producing any article or thing (except for notified ones) in any notified specified area in the states of Sikkim, HP, Uttaranchal or the North eastern States
Quantum of deduction -100% of profits for first 10 yrsb. Business of manufacturing or producing any article or
thing in operation mentioned in schedule XIV in any area other than the notified specified area in the said state
Quantum of deduction-100% of deduction for first 5 yrs
SECTION 80ID
Deduction is allowed to assessee whose gross total income includes any profit and gain derived from –
a. The business of hotel located in National capital territory of Delhi, and districts of Faridabad, Gurgaon, Gautam Budh Nagar and Ghaziabad if such hotel starts functioning between the period of 1/04/07 to 31/03/2010
b. The business of building, owning and operating a convention center located in the same areas above between the same period
c. The business of hotel located and constructed in the specified district having World Heritage site if such hotel has started functioning in period of 1/04/2008 to 31/03/2013
Quantum of deduction: 100% of profits for 5 consecutive yrs
SECTION 80IE
Allowed to assessee whose gross total income includes any profits and gains derived by undertaking which fulfills the following conditions:
1. Begun its operations to manufacture any eligible article or thing in any of North eastern states between period 1/04/07 to 1/04/17
100% of the profits for 10 consecutive yrs is the allowable deduction
SECTION 80JJAWhere gross total income of assessee
includes any profits or gains from the business of collecting and processing or treating of bio degradable waste for
a. Generating power orb. Producing bio fertilizers bio pesticides, or
other biological agents orc. Producing bio gas ord. Making pellets or briquettes for fuel ore. Organic manureQuantum of deduction: 100% of such profits
for 5 consecutive years
SECTION 80LA
The deduction shall be allowed to an assesee:a. Being scheduled bank or any bank
incorporated by or under laws of country outside India and having offshore banking Unit in SEZ
b. Being unit of an international financial service center
Quantum: 100% of such profit for first 5 consecutive yrs
50% of such profits for next 5 consecutive yrs
PROVISION OF SECTION 10A
Applicable for companies who derive any profits and gains from an undertaking engaged in export of articles or things or computer software
Period of tax holiday : for 10 yrs upto AY 2011-12.
SECTION 10A Units established in SEZ on or after 1/04/2002 Allowed a deduction of 100% of profits for first
5 yrs and 50% of profits for next two years and will be allowed a deduction even after AY 2010-11
Plus additional deduction for three years to the extent of following shall be allowed:
a. 100% of profits of such undertaking from exports from AY 2005-06 to AY 2009-10
b. 50% of profits of such undertaking from exports of AY 2010-11 to AY-2011-12
c. 50% of profits of such undertaking from exports from AY 2012-13 to AY 2014-15
PROVISION FOR SECTION 10B
Profits and gains are derived from 100% EOU
Period of tax holiday is same as given in Section 10A
RATES OF TAX
The Indian Companies are charged with a flat rate of 30% and foreign companies at 40%
If the Net Taxable profits are more than one crore than a surcharge @ 10% will be levied on the tax amount
Apart from the main tax rate there is a compulsory levy of education cess of 2% and higher education cess of 1%
OTHER PROVISIONS
DIVIDEND DISTRIBUTION TAX SECTION 115O
The tax that is payable by the companies while distributing the dividends is called as dividend distribution tax.
The tax is payable both on equity shares dividend as well as preference share dividend
The tax rates are different for both mutual fund companies and other companies
Generally the companies deduct the tax from the amount payable to shareholders.
Particulars Tax Rates
Dividend Distribution TaxBy Domestic Company 16.61%By Money Market Mutual Fund or Liquid Fund
27.68%
By Other Mutual Funds - For income distributed to Individual / HUF 13.84%- For income distributed to others 22.15%
FILING OF RETURN
Companies are required to submit a return in ITR 6 online before the due date
The current due date for Companies is 30th Sept following the end of the financial year
AUDIT
Companies are liable to get their accounts audited every year as per the Companies Act 1956 even if they do no business during the year
If the companies turnover crosses the specified limit (currently Rs 60 lacs) then they need to undertake Audit under even the Income tax Act 1961 this is under provisions of Section 44AB
TDS
Every company must have a TAN Number
The company needs to deduct Tax at source on every payment which they make exceeding the specified limit specified under the Act
If the company fails to make the deductions they will not have the expenses allowed under the Act
TAX DEDUCTION AT SOURCEThe meaning of Tax Deduction at Source (TDS)
is that when a person is making payment to another above a certain exempted limited he needs to deduct tax and make the payment to the Government. Such Deductions are made in the case of following payments
1. Salaries 6. Interest
2. Rent 7. Royalty
3. Commission 8. Non Resident payments
4. Professional Fees
5. Contractors
WHO IS REQUIRED TO DEDUCT TAX AT SOURCE?
All Individual’s & HUF’s who are liable to get their accounts audited u/s 44AB
All Companies All Partnership firms All Association of Persons All Body of Individuals
TDS ON SALARIES 192B
If the employees income exceeds the following tax needs to be deducted by employer:-
-Rs 1,90,000 in case of woman assesses
-Rs 2,40,000 in case of Senior Citizens
-Rs 1,60,000 in case of all others
The deduction would be made as per the tax computation
TDS ON PROFESSIONAL FEES-194J
If the payment to a professional person in aggregate during the year exceeds Rs 20,000 then tax needs to be deducted.
The tax rate is at 10%
TDS ON CONTRACTORS-194C
If the payment to a Contractor in aggregate during the year exceeds Rs 20,000 or Rs 50000 for advertisement contractor then tax needs to be deducted.
The tax rate is as follows1. For Individuals and HUF’s – 1 %2. For Other contractors -2%In case of transporters if the
contractor furnishes PAN then no tax is to be deducted.
TDS ON INTEREST -194A
1. In case interest is from banking company Rs 10000 is the cut off limit and rate is 10%
2. In case interest is not from banking company Rs 5000 is the cut off limit and rate is 10%
TDS ON RENT-194I
Rent implies rent other than plant and machinery and plant and machinery rent also
If the payment to a person in aggregate during the year exceeds Rs 1,20,000 then tax needs to be deducted.
The tax rate is at 2% for use of machinery and 10% for use of land or building
TDS ON COMMISSION OR BROKERAGE-194H
Rent implies rent other than plant and machinery and plant and machinery rent also
If the payment to a person in aggregate during the year exceeds Rs 1,20,000 then tax needs to be deducted.
The tax rate is at 2% for use of machinery and 10% for use of land or building
INDIVIDUAL AGE<65 ,MALE
UPTO 160000 NIL160001-300000 10.00%300001-500000 20.00%MORE THAN 500000 30.00%
INDIVIDUAL AGE<65 ,FEMALE
UPTO 190000 NIL190001-300000 10.00%300001-500000 20.00%MORE THAN 500000 30.00%
RESIDENT SENIOR CITIZEN
UPTO 240000 NIL240001-300000 10.00%300001-500000 20.00%MORE THAN 500000 30.00%
AY 2012-13 INDIVIDUAL AGE<65 ,MALEUPTO 180000 NIL180001-300000 10.00%300001-500000 20.00%MORE THAN 500000 30.00%
INDIVIDUAL AGE<65 ,FEMALE
UPTO 190000 NIL190001-300000 10.00%300001-500000 20.00%MORE THAN 500000 30.00%
RESIDENT SENIOR CITIZEN
UPTO 250000 NIL250001-300000 10.00%300001-500000 20.00%MORE THAN 500000 30.00%
WHAT IS THE OBLIGATION OF THE PERSON DEDUCTING TAX AT SOURCE
The person deducting TDS needs to fulfill the following obligations:-
1) He need to hold a TAN number
2) When the collection is made he need to pay it to the credit of the Government, within 7 days of the month following the deduction
3) He is required to file a quarterly statement of Tax Deduction at Source. This shall be done online if the deductor is a Company, otherwise it is a form filled up and submitted to the Government office at the Income tax Department TDS cell.
4) The Deductee would be issued a certificate in FORM 16A at the end of the year before 30th April of the next accounting year
HOW CAN ONE CHECK THE TDS DEDUCTIONS FROM THE PAYER
System of 26AS of online view facility of TDS deductions is available
One can register with the NSDL centers for getting the online 26AS.
After registering online one needs to take the print of the form and PAN (original and copy) to any TIN facilitation center in person and validate the same
After 3 days one can get the 26AS online statement
WEALTH TAX ACT 1957
APPLICABILITY
This act applies to the whole of India It is deemed to come in force on 1st April 1957 It is applicable to every person who is an
assessee. An assessee includes: a. every person in respect of whom a
proceeding under this act has been taken b. every person who is deemed to be an
assessee under this act c. every person who is deemed to be an
assessee in default under this act
CHARGE OF WEALTH TAX
The computation of Net wealth of the Company needs to be done every assessment year
The Net wealth of the company will be chargeable to tax if it exceeds the prescribed limit specified in the Act
Currently the Net Assets are Rs 30 lac and above the charge of Wealth tax exists
FILING OF RETURNS
Returns under the wealth tax are taken up based upon the same due date as that of Income Tax
The assessments and governing authorities are same as that of Income Tax
